- Fortune, Tuesday, April 25, 2006 11:45 AM
Adam Lashinsky and a team of
Fortune reporters do an excellent job of explaining how the latest Internet boom--a legit boom this time around--is affecting the valuations of old-media companies,
even where, according to Lashinsky, the impact is not warranted. Just look around at today's hot companies: Pixar Animation, Apple Computer, Google, Electronic Arts. Small fry just a few years ago,
each is now a major player on the worldwide stage. But are they worth investing in? Lashinsky asks. Are they overvalued? Some are, some aren't. And, as this piece points out, one can still get
burned by investing in new media. There's plenty of hype out there. One needs to very carefully examine a company's actual profits, not just its potential profits. For example, MySpace.com, owned
by News Corp., is definitely on fire, poised to overtake Yahoo in its number of users in the not-too-distant future. And yet, in the value it adds to News Corporation's stock price, it still
represents just a tiny percentage. Point? Investors need to be as vigilant as ever when considering the actual upside of high-flying Net stocks. And no, old media is not dead yet.
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